On many issues, including the idea of taxing carried interest income, President-elect Donald Trump needs to stand up against liberal Democrats wanting to impose more jobs-killing taxes on the American economy. This is no more true than it is with Sen. Chuck Schumer (D-NY) wanting to put taxes on carried interest income earned by investment fund managers. Schumer calls the lack of tax, on this money paid to managers of profitable investment funds, a loophole but he doesn’t tell you that this money was already taxed as corporate income. Taxing it again, and taking more money away from jobs creation and investment, would only doubly tax money that would more effectively be invested in a prosperous economy if not taxed by the federal government. But we know how much more liberal Democrats like Sen. Schumer want to collect a never-fast enough growing steam of federal tax revenue to spend in Congress.
Donald Trump has known Sen. Schumer for many years, and the latter basically said he would work with the new president whenever Trump should agree with the liberal agenda supported by the incoming Senator Minority Leader and other liberal Democrat politicians. Schumer recently stated, “if the president-elect proposes legislation on issues like infrastructure and trade and closing the carried interest loophole, for instance, we’ll work in good faith to perfect and potentially enact it.”
As president, Trump should applaud the willingness of Sen. Schumer to work with him. He can point out how economically destructive it will be to increase the tax burden on the American people, and challenge him to work with the new president on areas where they can be politically productive and seek policy initiatives that will benefit the economy. They could work together on areas such as infrastructure rebuilding, tax cuts, and deregulation that will spur strong economic growth and much needed creation of millions of jobs for the American people that elected the new president to pursue a prosperity agenda.
Levying taxes on carried interest is double taxing of this money because it was taxed already as corporate income. In this way, it is like Capital Gains, which is another form of income that taxed twice, if carried interest is taxed as Sen. Schumer proposes. Any money taken in taxes in this way directly takes away from what will be invested in business and create new jobs for the American people. At time when we have more than 95 millions unemployed, and Trump as candidate pledged to grow the economy and create millions of new jobs, adding more taxes should be the last idea given any serious consideration.
Liberal Democrats, on the other hand, can’t resist any temptation to add new taxes, regardless of how economically destructive. There is a fundamental difference of direction between the views of the incoming president and politicians like Sen. Schumer. The views of the latter were represented on election day by former Secretary of State Hillary Clinton, and the American people chose Trump instead. Elections have consequences, and very real ideas and differences are decided at the ballot box.
The American people elected Trump to reform government and bring back prosperity. Senators Schumer and others need to work with the president, who was duly elected, and work with him on the priorities that will help build economic prosperity, not those that would be detrimental to it. It is quite easy to demagogue the issue and attack investment fund managers. But taxing this income and preventing it from being invested in jobs creation only denies the average unemployed Americans on Main Street the jobs they need. This is what needs to be remembered by our elected officials in Washington D.C. when the decision is made on taxing carried interest. The American people elected them to pursue economic prosperity and create millions of jobs, not destroy them with burdensome regulations and excessive taxes.